Microsoft shares soar as Ballmer announces intention to quit

Shares in Microsoft soared yesterday after its chief executive Steve Ballmer said he was bringing the curtain down on 30- year career with the technology company. Hot on the heels of a major reorganisation, the chief executive has announced that he will step down from his role as head of the company within 12 months, as soon as a successor is found.

The hunt for a new chief has already begun, with Microsoft appointing a committee to oversee the process, led by independent director John Thompson and including Microsoft chairman and founder, Bill Gates.

It is a muted end for Mr Ballmer (57), who became known for flamboyant stage appearances throughout his 13-year reign. A short statement on Microsoft’s site and the news was broken.

He cited the company’s transformation plan as the reason for his sudden decision, saying his original plans would have seen him leave the company in the middle of its move to a devices and services company.

In an email to staff, Mr Ballmer said it was an “emotional and difficult thing” to do. “I love this company. I love the way we helped invent and popularise computing and the PC. I love the bigness and boldness of our bets,” he said.

“I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matter to me most.”

A college friend of Mr Gates, Mr Ballmer joined Microsoft in 1980, becoming the start-up’s 30th employee and the first business manager in the firm. He progressed through the ranks, heading up several of the company’s divisions and becoming president of the firm in 1998. However the company has struggled in recent years to adapt to the changing landscape in the PC market, as consumers bought fewer PCs and more mobile devices.

Last year, Vanity Fair published a damning indictment of the company, dubbing the bulk of Mr Ballmer's reign as chief executive as the firm's lost decade. Microsoft's stock has lost about 40 per cent of its value since he took over in 2000 and the company has fallen behind in innovation as it stagnated beneath its own bureaucracy.

The launch of Windows 8 in October 2012 was intended to show that Microsoft could compete in this new era of mobile devices, but although the firm has had some success – its sales of Windows 8 licences were roughly in line with its previous Windows 7 system – its latest results showed a writedown on $900 million on its stock of unsold Surface RT tablets, after it cut the price of the device.

Windows guru Steve Sinofsky left the company only weeks after the launch of Windows 8, and has since joined venture capital first Andereesen Horowitz.

Although Mr Ballmer's mistakes were well publicised – he dismissed the iPhone and the iPad and described Google as "a house of cards" – Microsoft's revenues more than tripled and profits doubled during his tenure.

The company has built a successful games business with the Xbox console and is making attempts to re-establish itself in the mobile phone sector with Windows Phone.

Mr Ballmer himself has built up a considerable personal fortune; as of March 2013, he had a net worth of $15.2 billion and number 22 on the Forbes list of US billionaires.

The effects of the recently implemented reorganisation of Microsoft’s divisions, more or less reversing some changes Mr Ballmer had implemented years earlier, have yet to be seen.

Who will succeed him is not clear. In addition to the committee, the company said executive recruitment firm Heirdrick & Struggles would be involved in searching out both internal and external candidates.